What do we do to save Detroit? The latest industry crumbling under this economic downturn, as we all know, is the American auto industry. The big three have gone to Congress and asked for 25 billion dollars in loans to get them through this latest mess. The problem I have with this bailout is the fear that it’s only a temporary fix.
The American auto companies have, by any explanation, made their own beds. I remember as a kid in the 70’s the huge loans given to the car companies so they could survive and retool to become competitive with the Japanese carmakers. Well, they servived, barely, and didn’t even attempt to compete with the foreign automakers. They have fought tooth and nail to avoid being forced to have minimum standards when it comes to mileage capabilities for their cars. Over the last ten years we’ve seen more SUV’s. than at any time that I can remember. Can someone explain how and why the Hummer even exists as transportation for the general public?
The other side of that is what happens if they don’t get the bail out? From what I’ve read and seen on the news in the last couple weeks, one in 10 workers in the United States is somehow connected to the auto industry. That doesn’t mean that 10% of all workers would lose their job but I’m sure a good portion of them would. The ones that don’t would probably lose hours along with getting pay cuts along with benefit cuts and so on and so on. Imagine what that does to the economy.
There is an idea out there for the government to kind of take over the big three. Has anyone noticed what a wonderful job the folks in Washington have done in running the business of this country? I’m not sure I’d want them running the car companies.
I’m really not sure where I sit on this one. Either way becomes a pretty frightening scenario. I know I don’t trust American cars; I’ve had foreign vehicles for years. Some say that it’s people like me that has helped bring these companies to their knees. I couldn’t disagree more on that. I would have gladly bought American if they were even close to the quality of my Nissans or Toyotas over the years.
I’ve really gotta think about this one.
2 comments:
Kevin,
You need to get out more. Detroit quality is comparable to anyone out there today. Check it with JD Powers. Historic concessions have been negotiated with the UAW. Retiree medical benefit costs will shift to the union in 2010. The Detroit three have shut many assembly plants and laid off tens of thousands of employees, both blue and white collar.
I can't blame you for buying Japanese based on past performance, but the past is now 10-15 years ago. Just ask anyone that bought a Toyota minivan, with the V6, in the last few years. The engine sludges up due to poor oil flow and self destructs before 40,000 miles. Toyota's position is that people are not changing their oil often enough, and denying warranty.
It IS people like you that wont even LOOK at a Detroit brand that are part of the problem.
Remember, this is a loan and we get warrants. It is not a give away. Last time the government loaned Chrysler money it was paid back early with interest.
They made big cars and trucks because that is what we Americans want. I wouldn't be caught dead driving that tiny econobox you call a car. Our tastes change in a period of weeks or months. It takes two to five years to design a new car. (2.5 for the Japanese, 3-4 for Detroit, 4-5 for the Germans.)
Detroit car makers are very innovative. GM will have the first production electric car (Volt) in the world in 2010. They have 20 models that get over 30 MPG, and Chrysler has 9 over 28.
For more details review the testimony that they gave to congress over the last two days.
The Detroit automakers made some poor decisions, but there is no way that they could have seen the current banking fiasco coming. Ford and GM were both profitable in the first quarter, and were well on their way to recovery when the banks failed. Nobody saw this coming, not the banks, not the industry, not even Greenspan saw this coming. The banks caused this mess, and we bailed them out. They don't even produce anything. The automotive industry actually produces a product. Each automotive job produces at least 5 support jobs. Banking produces paper, and now most of that isn't worth anything.
The Automotive Industry and the UAW created today's middle class. If they fail, a major path to the American Dream will no longer be there. $25 Billion seems cheap.
Mark H
i have to agree with you on the foriegn car issue. my mustangs were always in the shop. my toyota 165,000 miles and hardly a hic-up. build a car that lasts america, we did'nt put the industry out of bussiness! they out sourced all these jobs. by american? is it made in america anymore? one word. greed!
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